11. INCOME TAXES

Provision for income taxes consisted of the following for the periods indicated (in thousands):


	Year Ended March 31
	2021		2020		2019
Current	$	4,410	$	5,404	$	5,157
Deferred		(1,429)		(574)		(11)
Total	$	2,981	$	4,830	$	5,146

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows at the dates indicated (in thousands):


	March		March
	31,		31,
	2021		2020
Deferred tax assets:
Deferred compensation	$	75	$	63
Allowance for loan losses		4,725		3,143
Accrued expenses		212		137
Accumulated depreciation and amortization		862		935
Deferred gain on sale		90		129
Purchase accounting		101		123
Net unrealized loss on investment securities available for sale		50		—
Operating lease liabilities		2,204		971
Other		412		352
Total deferred tax assets		8,731		5,853
Deferred tax liabilities:
FHLB stock dividend		(38)		(38)
Prepaid expenses		(214)		(84)
Operating lease right-of-use assets		(2,108)		(947)
Net unrealized gain on investment securities available for sale		-		(663)
Loan fees/costs		(952)		(844)
Total deferred tax liabilities		(3,312)		(2,576)
Deferred tax assets, net	$	5,419	$	3,277

A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows for the years indicated:


	Year Ended March 31,
	2021		2020		2019
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State and local income tax rate	3.0		3.0		3.0
ESOP market value adjustment	(0.1)		(0.1)		(0.1)
BOLI	(1.5)		(1.0)		(0.8)
Other, net	(0.3)		0.6		(0.1)
Effective federal income tax rate	22.1	%	23.5	%	23.0	%

For the fiscal years ended 2021 and 2020, the Company utilized a federal corporate income tax rate of 21.0%. The Bank’s retained earnings at both March 31, 2021 and 2020 include a base year allowance for loan losses, which amounted to $2.2 million, for which no federal income tax liability has been recognized. The related unrecognized deferred tax liability at March 31, 2021 and 2020 was $528,000. This represents the balance of the allowance for loan losses created for tax purposes as of December 31, 1987. This amount is subject to recapture in the unlikely event that the Company’s banking subsidiaries (1) make distributions in excess of current and accumulated earnings and profits, as calculated for federal tax purposes, (2) redeem their stock, or (3) liquidate. Management does not expect this temporary difference to reverse in the foreseeable future.

At March 31, 2021 and 2020, the Company had no unrecognized tax benefits or uncertain tax positions. In addition, the Company had no accrued interest or penalties related to income tax matters as of March 31, 2021 and 2020. It is the Company’s policy to recognize potential accrued interest and penalties related to income tax matters as a component of the provision for income taxes. The Company is subject to U.S federal and State of Oregon income taxes. The years 2018 to 2020 remain open to examination for federal income taxes, and the years 2017 to 2020 remain open to State of Oregon examination.